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Retail round up - The Sunday Papers
Blooming Marvellous may be fading, David Jones becomes executive chairman of JJB, M & S predicted to report poor trading figures, Mosaic to start crunch talks, Companies to pursue Woolworth's for stock
Sunday TelegraphBlooming Marvellous, the popular maternity chain, is teetering on the edge of collapse this weekend in the latest sign that the carnage sweeping across Britain's high street is gathering pace. An insider said the 14-store chain, which is owned by Arev, the stricken Icelandic investor, was "bracing itself for the end but had not given up", as a Blooming Marvellous store in Chester closed and the firm's website shut down. Zolfo Cooper, formerly owned by Kroll, is advising Arev and could be in line to be the administrator for Blooming Marvellous. The decline of the retailer has left a raft of other British shops owned by Arev fighting to avoid administration. Arev, which is backed entirely by Icelandic money and has been ensnared in the country's ongoing banking crisis, also owns luxury brand Duchamp and fashion chains Cruise, Limeys and Flannels.
Woolworths' staff in Jersey have launched a petition after being told they will not receive a redundancy payout. More than 2,500 people have already signed the petition - which calls for compensation for the 120 employees - after it was made clear that UK statutory redundancy payouts do not apply to the Channel Islands. Jersey politician Deputy Geoff Southern warned the island's government that it must provide £140,000 to support the
The Bank of England is this week poised to cut interest rates to the lowest level in its 300-year history, in the latest sign of the severity of the economic crisis. The Monetary Policy Committee (MPC) is widely expected to use its two-day meeting this week to cut the benchmark Bank rate below its current 2pc level - the first time this has been done since the Bank was founded in 1694. The radical move is regarded as essential if the UK is to stand any chance of avoiding slipping into a Japan-style depression.
Financial Times Sat / Sun
JJB Sports received a much-needed shot in the arm on Friday after a management reshuffle put Sir David Jones in the driving seat at the sportswear chain. Shares in the retailer, singled out by analysts as one of the most likely retail victims of the credit crunch, surged by more than a quarter on Friday after it announced that Sir David would become executive chairman, having joined the group as deputy chairman in October.It means that Sir David, the former chief executive of Next, will take over the running of the business from Chris Ronnie, who has had a torrid time at the retailer since acquiring the biggest stake from from founder Dave Whelan in 2007. Sir David is also bringing in Peter Williams, the former Selfridges chief executive, as a senior executive to help him carry out a strategic review of the group.
John Lewis Partnership saw a 20 per cent surge in trading in Christmas week, although most growth came from Waitrose, its chain of upmarket food stores.Sales at the employee-owned group rose 22.1 per cent year-on-year in the week to December 27, with turnover at Waitrose soaring 40.6 per cent to £111.3m, including the strongest trading day in its history on December 23. That easily outperformed a 1.2 per cent increase in sales to £71m for John Lewis's high street flagship chains.
Online entertainment retailer Play.com said that it is “beating the credit crunch” after reporting a 24 per cent jump in like-for-like sales during the Christmas period compared with last year. The privately owned company said that sales of the film Mamma Mia! on DVD and Take That's latest album The Circus, had driven revenues for the four months until the end of December, showing that the online retail sector is more resilient to the looming recession than many have warned.
Sunday Times
Marks & Spencer will report one of its worst Christmas trading performances in more than 80 years as a public company, laying bare the full extent of the crisis engulfing the high street. Britain's biggest clothing retailer is expected to reveal that sales of general merchandise, excluding food, have tumbled by about 6%-8% during the third quarter and margins have been dented by steep discounting in the run-up to Christmas. Food sales are expected to have benefited from consumers trading up to premium ranges as a festive treat - but analysts are still pencilling in a sales drop of 5% to 10%. Overall, sales are expected to be down by between 5.5% and 9.6%.
The owner of Karen Millen, Oasis and Principles is poised to begin crunch talks with its lenders in a desperate attempt to secure the long-term future of the company. Mosaic, part-owned by Icelandic investor Baugur, is to start talks with the Icelandic bank Kaupthing about its working capital needs amid sliding sales and tough negotiations with suppliers. The business has been hit for months by the withdrawal of credit insurance and now some suppliers are demanding upfront payments, putting pressure on Mosaic's balance sheet. The company is not currently making any interest payments on its estimated £400m debt pile because its loans are under the control of a government-appointed committee now running Kaupthing, following the failure of Iceland's banking system.
One of Britain's biggest commercial landlords is poised to strike a ground-breaking deal to provide comprehensive financial assistance to cash-strapped high-street retail chains. Prudential is holding talks about cutting service charges on shopping centres and retail parks under its management and is considering reducing rents in cases where tenants are suffering extreme hardship. Martin Moore, managing director of Prupim, the Prudential's property arm, told The Sunday Times: “Our approach has historically been to provide assistance where companies holding existing leases with us demonstrate financial hardship.
Entertainment companies including EMI and Microsoft are preparing legal action against the administrators of Woolworths to claw back millions of pounds of stock. Although the shelves in its stores are emptying fast, Woolies' distribution arm, Entertainment UK (EUK), still has CDs, DVDs and computer games worth tens of millions of pounds in its warehouses. Under “retention of title” rules, suppliers can claim back their own stock if it has not been paid for but, more broadly, they can can claim stock that has been paid for in lieu of debts. That gives them the chance to resell the merchandise and prevent the administrator, Deloitte, offloading it cheaply.
The Observer
Vodafone and Orange are close to signing a deal that will see the two companies share the costs of technology, engineering and maintenance at their network base stations in the UK. The move, which could be announced shortly, is expected to save Vodafone £1bn a year at a time when revenue in some European countries is being hit by competitive pressure. The agreement is expected to be viewed positively by the City and should be seen as a feather in the cap of new chief executive Vittorio Collao, who took over from Arun Sarin.
The Independent on Sunday
A quarter of all British families will have no disposable income in 2009, dealing yet another blow to the beleaguered retail sector. In November, a survey by Nielsen and trade body the British Retail Consortium (BRC) found that 21 per cent of families had no spare cash left after essential living expenses. However, sector insiders expect this to grow to at least 25 per cent by the spring. A PricewaterhouseCoopers (PwC) survey last week showed that six in 10 people believe they will have less disposable income in 2009 than they had last year. Those in the lower socio-economic DE classifications were particularly gloomy, with nearly 70 per cent convinced they would have less money to spend on the high street.
The Mail on Sunday
Growth in online shopping is likely to slow dramatically this year, according to a firm that monitors web transactions. It is expected to halve to 20 per cent as websites attract fewer new customers and overall spending slows. 'After years of rapid growth, the online market is getting more mature and indications over the past few months suggest that it seems to be slowing', said Carl Clump, chief executive of Retail Decisions.
Sir Richard Branson's Virgin Group is set to inherit half a dozen stores from music retailer Zavvi just sixteen months after it quit retailing. Branson sold the Virgin Megastore chain to Zavvi, made up of former Virgin managers, in September 2007, but he still holds the leases on a number of Zavvi stores.
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Free for retailers to attend
Speakers already confirmed for the summit include:
Sir Brian Pitman, Former Chairman and CEO, Lloyds TSB Group; Former Chairman, Next plc and currently Director of The Carphone Warehouse Group plc.
Colin Temple, Managing Director, Schuh
Gillian Berkmen, Commercial Director, Mothercare
Clive Hutchings, Chief Executive, Allied Carpets
Judith Levy, CEO, High and Mighty Group
Meg Lustman, Chief Strategy Officer, Mosaic Fashions
Dr Patrick Allen, Executive Director of Marketing, Co-operative Group
Ruth Girardet, Corporate Responsibility Director, Tesco
Nicky Hill, Director of HR- Stores, Boots UK
Jonathon Brown, Director of Multi Channel, B & Q
Helen Mountney, UK Managing Partner, Kurt Salmon Associates
Jan Buckingham, Director of Global Values, Body Shop
Claire Balmforth, Group HR Director, Carpetright PLC
Catriona Marshall, Commercial Director, Pets at Home
Andy Moat, Director of Organisation Development, B & Q
Brian Farrelly, Director of Broadcasting, QVC
Richard Lowe, Corporate Director, Retail and Wholesale Sector, Barclays Commercial Bank
Francesca Ecsery, General Manager UK, Cheapflights
Dr Paul Pritchard, Head of Corporate Social Responsibility, Royal and SunAlliance
Adri Kraa, Head of Shop Online!, IKEA
Sonia Sharples, Head of Human Resources, Poundland Ltd
Xavier Vallee, Head of Direct Marketing EMEA, Avis Europe plc
Julie Mathers, Head of CSR, Baugur Group
David Oliver, Head of Marketing Programmes, Hertz Europe
Gillian Lipton, Corporate Responsibility Manager, Monsoon Accessorize
There are a limited number of complimentary places for retail executives available at this Summit. Choose day 1 or day 2 or both. To apply for your place follow the 'more details' link below or email: janeh@theretailbulletin.com
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